Translated German Cases and Materials under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz

Translated by:

Mr Raymond Youngs

Copyright:

Professor B.S. Markesinis

Facts

The claimant was involved in the manufacture of agricultural tractors in the period from 1989 to 1991 carried on by the defendant by the deployment of Croatian workers. This took place under several work contracts which the parties had concluded. The Federal Institute for Labour regarded the activity of the Croats as an unlawful supply of employees and imposed fines on the parties. The defendant thereupon terminated the work relationship with the claimant on the 31st May 1991.

The claimant charged the defendant for its services on the basis of the work contracts. The defendant only paid in part. Out of three accounts, a total sum of 363,610.99 DM (according to the claimant) and a sum of 363,561.24 DM (according to the defendant) remained unpaid. The claimant in its action claims from the defendant payment of 268,467.65 DM from the work contracts. According to its statement, this sum is expenses which it incurred when it payed the employees who were operating with the defendant in the calculation period of the unpaid bills (April and May 1991) and bore costs for their transport, working clothes, catering, for a group accident insurance and similar things. The claimant is of the view that it is entitled to this sum, with interest, either as a minumum demand on the basis of the work contracts concluded with the defendant or - if the contracts are ineffective because of unlawful supply of employees - in any case from the angle of unjustified enrichment or within the framework of a settlement between joint debtors to be effected between the parties.

The defendant has denied that the claimant is a company limited by shares in Croatian law and refused to make a payment. It has disputed the particulars put forward by the claimant for the calculation of its wage costs and wage oncosts and has challenged its calculation methods on considerations of principle, in so far as the claimant claims a partial sum for April 1991. Further, the defendant has asserted that the claimant had taken over the total costs connected with the official demands for the payment of the fines; therefore it has subsidiarily declared a set off in the sum of 44,346.52 DM. Additionally the defendant has referred to a right of retention, because it is threatened (by way of settlement between joint debtors) with the burden of half of the social insurance sums claimed against the claimant by the General Local Health Insurance Fund at K (AOK K) and the claimant had also promised its release in this respect. Finally the defendant has raised the objection of time limitation.

The claim was unsuccessful at both previous instances. The claimant pursues its claim to payment further by the appeal in law.

Grounds

The claimant's appeal in law is successful. It leads to quashing and reference of the case back to the appeal court.

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II. The appeal court has left open whether the work contracts concluded between the parties are ineffective according to § 9 no. 1 of the AÜG. According to its view, the claim is based neither on the work contract (§ 631 of the BGB) nor on unjustified enrichment (§ 812 of the BGB) nor on a settlement between joint debtors (§ 426 of the BGB), because the demand is time barred.

1. The appeal court has, in examining the time barring of the claim to wages for work, assumed in favour of the claimant that on the conclusion of the contracts it was a merchant in the sense of § 196 (1) no 1 of the BGB. As the claimant's services indisputably arose for the defendant's business, it has correctly assumed that the claim to wages for work by the claimant is subject to a four year limitation period (§ 196 (2) in combination with § 196 (1) no 1 of the BGB) which began on the 1st January 1992 and expired on the 31st December 1995 (§§ 198, 201 of the BGB).

This limitation period was not, in the appeal court's view, interrupted by the raising of the claim by the writ of the 28th December 1995. On this subject, the appeal court has in substance stated as follows. The claimant first claimed the alleged wages for work by the statement of its case of the 26th April 1996 which arrived at the court on the 30th April 1996 - and therefore after expiry of the limitation period. In the writ, merely referring to the invalidity of the concluded contracts because of unlawful supply of employees, it had only demanded under the principles of unjust enrichment the delivery of what the defendant has saved as hirer by the fact that not it - the hirer - but the claimant as supplier paid the casual labour employees and had borne further expenses for them. It was not until the statement of case of the 26th April 1996 that the claimant had proceeded on the basis of the effectiveness of the work contracts and derived from them a contractual claim to reimbursement. It had thereby presented a different real life factual content than that in the writ. The writ had proceeded on the basis of the nullity of the contractual relationships because of unlawful supply of employees, and the procedural claim had taken account of the historical event of the payment of the employees by the claimant; the statement of case of the 26th April 1996 took account of the validity of the contractual relations and the procedural claim was derived from the contractual supply of services by the claimant to the defendant. The claim and the statement of case of the 26th April 1996 therefore contained different objects of dispute, even if both pursued the same goal. These observations are successfully challenged by the appeal in law.

a) According to § 209 (1) of the BGB, time limitation is interrupted when, amongst other things, the person entitled to satisfaction of the claim issues a writ. The scope of the effectof the interruption is at the same time determined by the claim to performance made by the application in the claim and forming the object of dispute. All the substantive law claims are covered which can be derived within the framework of the application which has been made from the real life factual content put before the court for decision. It does not depend on the claimant's legal reasoning; in this respect, the interruption effect is not subject to his disposition (references omitted).

b) According to these principles, the limitation period has been broken by the issue of the writ. The claimant has put forward in its writ, as the basis of its application for payment, that its employees had been engaged in the manufacture of agricultural tractors in the defendant's business. The deployment had occurred within the framework of the work contracts. It - the claimant - had paid its employees for this activity and borne the further costs which arose as a result of the deployment. From these facts a claim to payment can be derived from the point of view of unjustified enrichment and from the work contracts. A claim for enrichment assumes that the creditor has unlawfully supplied employees to a third party for the carrying out of work and - instead of the hirer who would have been under a duty to this effect according to § 10 (1) of the AÜG - has paid the employees. The decisive issue for contractual claims to reimbursement is whether the contract was concluded and the performance which was contractually owed, and to be paid for, has been carried out. The claims are admittedly in this repect in the alternative to each other, as the enrichment claim assumes the ineffectiveness of the contract, whilst the claim for payment for work on the other hand assumes its effectiveness. Besides this, the enrichment claim is directed towards compensation for the wages paid and the further costs, whilst the claim to payment for work is aimed at reimbursement contractually owed, which is calculated in a different manner to compensation for wages.

On the question of the effectiveness of the contract concluded between the parties, it is to be deduced from the facts as put forward in the writ that the Labour Office established an unlawful supply of employees and imposed fines on both parties. The claimant has in this respect referred expressly to the case law of the Bundesgerichtshof on the enrichment claim by a supplier on an unlawful supply of employees (reference omitted), and on this basis calculated the payments made by it and the subsidiary costs at 268,467.65 DM, which corresponds to the sum claimed. Apart from this, the claimant has named the three "still outstanding invoices for payment for work" or "still outstanding demands for payment for work", with invoice number and date, and placed a figure of 363,610.99 DM on the total sum. It claimed that it had repeatedly warned the defendant about this and that now a claim was required.

Accordingly, the real life factual content put forward includes the possibility that the work contract is ineffective because an unlawful supply of employees in fact occurred, and the other alternative that the work contract is effective. The appealcourt's opposite view (according to which the claimant did not take into account validity of the contractual relationships in the writ, and only did so for the first time in the statement of case of the 26th April 1996, and therefore an interruption of the limitation period had not occurred) fails to recognise that the determination of the procedural claim only depends on the real life factual content put forward by the claimant, and not on how the claimant has legally assessed that content. Besides this the claimant's case in the statement of case of the 26th April 1996 contains no new facts over against the factual statements on the effectiveness of the work contract in the writ. The only difference lies in the fact that the claimant expressly declared for the first time that the work contract was effective and its claim was also derived from the work contract. Against the background of the factual explanations in the statement of case, it expresses nothing more than the legal view that the claim was also based on the work contract.

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2. The appeal court has also denied interruption of the limitation period on the premiss that the concluded contracts were ineffective because of unlawful supply of employees in accordance with § 9 no. 1 of the AÜG. It has stated that no claim on the basis of unjustified enrichment by the claimant against the defendant existed for compensation for value for the services which the claimant's sub-contracted employees had provided for the defendant. Such a claim was excluded by the regime in § 10 of the AÜG, without it depending on whether the parties had deliberately violated the provisions of the AÜG, and sentence § 817 sentence 2 of the BGB prevented a claim by the supplier to compensation for value in enrichment law. As a result of the fact that the AÜG in § 10 invented a work relationship between the hirer and the employee which would be accompanied with a claim to payment by the employee against the hirer, in the cases of supply of employees without the necessary permission in accordance with § 1 of the AÜG there would be no room for further claims. This is because the negative legislative value judgement which applied to illegal supply of employees is directed primarily against the supplier who operated without permission to supply. In the end it did not, however, depend on these considerations because it was unimportant for limitation in accordance with § 196 (1) no 1 of the BGB whether the claim was based on contract, management of another person's affairs without mandate or unjustified enrichment.

This also does not stand up to a legal examination in the appeal in law.

a) The claim by the claimant for compensation for value for the services of the illegal employees based on unjust enrichment (§§ 812 (1) sentence 1, 818 (2) of the BGB) is subject to the four year limitation period in accordance with § 196 (1) no 1, (2) of the BGB in so far as the claimant, on conclusion of the contract with the defendant, was a merchant in the sense of the Commercial Code, asthe appeal court has assumed in favour of the claimant. The enrichment claim has taken the place of a claim to reimbursement based on the work contract, because of the ineffectiveness of the work contracts which had to be assumed here (references omitted). The four year limitation period which was also crucial here has been interrupted by the raising of the claim, because the claimant has in any case by its claim asserted the enrichment claim.

b) The appeal court is incorrect in considering that the claimant's enrichment claim for compensation for value was displaced by the special rules of the AÜG. The absence of the necessary permission under § 1 of the AÜG admittedly leads to the ineffectiveness of the contract concluded between the supplier and the hirer (§ 9 no 1 of the AÜG). This certainly does not mean that for this reason an enrichment settlement between the supplier and the hirer of the workers had to be excluded. If the supplier has provided services to the hirer by supply of employees, this forms the basis of a claim under §§ 812 (1) sentence 1 alternative 1, 818 (2) of the BGB which is directed to compensation for the enrichment which has objectively occurred for the hirer, in so far as such can be established having regard to § 10 (1) of the AÜG.

Contrary to the view of the appeal court, this also does not contradict the regime in § 10 (1) sentence 1 of the AÜG, according to which on the ineffectiveness of the contract under § 9 no 1 of the AÜG, a work relationship is invented between the hirer and the sub-contract employee. This provision does not exclude from the outset an enrichment claim by the supplier against the hirer (reference omitted), because the fiction of a work relationship between the hirer and the sub-contract employee has been created, in accordance with the intention of the legislator, in the interest of the sub-contract employee alone. The sub-contract employee should thereby receive a stronger protection than would perhaps have been the case with a subsidiary liability of the hirer for the fulfilment of the duties of the supplier towards him (references omitted).

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2. Finally the claimant cannot demand from the defendant a settlement for the wages paid and further costs as joint debtor in accordance with § 426 of the BGB.

a) The appeal court has denied a joint debtor relationship between the parties. The sub-contract employee only had a claim to reimbursement against the hirer under § 10 (1) of the AÜG on ineffectiveness of the supply arrangement; he was not also in a real work relationship with the supplier. Therefore the supplier and the hirer would not be in a joint debtor relationship.

b) In this respect the challenges by the appeal in law are unsuccessful.

The view held by the appeal court corresponds to the principlesdeveloped by the Bundesgerichtshof, according to which there is no joint debtor relationship (§ 421 of the BGB) between the supplier and the hirer of unlawfully supplied workers (references omitted). The contrary view (references omitted) fails to recognise that on ineffectiveness of an arrangement for supply of employees in accordance with § 9 of the AÜG, the relationship between supplier and sub-contract employee is definitively regulated by statute. The fiction of a work relationship between hirer and sub-contract employee has been created exclusively in the interests of the sub-contract employee. The sub-contract employee should thereby receive a stronger protection than would perhaps have been possible by a subsidiary liability of the hirer for all the duties of the supplier towards him (reference omitted). The goal pursued of realising a "just settlement of interests between the participants" (reference omitted) did not make it necessary to present to the sub-contract employee two employers liable in a joint debt relationship for his claims. According to the intention of the legislator, the hirer should instead be "the sole employer of the sub-contract employee with all the duties arising from this" (references omitted). This concept also finds its expression in § 10 (2) of the AÜG. According to this provision, the sub-contract employee has a claim against the supplier for compensation for the harm which he suffered from the fact that he trusted in the validity of the contract. This in particular includes the case of the hirer not fulfilling his duties under § 10 (1) (reference omitted). Such a regime is not reconcilable with the assumption of a real work relationship and with a claim to fulfillment by the sub-contract employee against the supplier resulting from this and directed towards payment of reimbursement.

Besides this, § 10 (3) of the AÜG argues against the assumption of a joint debtor relationship between the supplier and the hirer. According to this provision, the supplier should, if he pays to the sub-contract employee the agreed sum for the work wholly or in part, be under a duty, along with the hirer as a joint debtor and employer, to payment of the other parts of the sum for the work to another which would have been payable to that other on an effective work contract for the sub-contract employee. Such a regime would not however have been necessary if the legislator had assumed a general duty of the supplier as employer - in particular also for payment of the wages - because of the existence of a real work relationship. Accordingly it was accepted in the legislative process that the supplier is not to be seen legally as the employer. The introduction of § 10 (3) of the AÜG by the Second Act to combat Business Crime of the 15th May 1986 (reference omitted), which in its original version, besides the "other parts of the work payment which were to be paid to another on an effective work contract for the sub-contract employee", also included the entire insurance contribution (sickness, pension and unemployment insurance) was merely to prevent the supplier who has actually made payments for work on an unlawful arrangement for the supply of employees being able to evade the duties applying to employers and protected by criminal law merely because he is not to be seen in law as an employer (references omitted).

Besides this, the assumption of an actual work relationship between the supplier and the sub-contract employee would also not be reconcilable with the case law of the Bundesgerichtshof, according to which the supplier is entitled on payment of wages to the sub-contract employee to claims to compensation against the hirer for enrichment because of repayment of a third party debt in accordance with §§ 812 (1), 267 of the BGB (reference omitted). This is because the supplier would then have paid on his own debt and not a third party debt.

IV. As the appeal court has not made clear whether the work contracts of the parties are effective and the claimant is entitled to a claim to reimbursement under § 631 of the BGB, or whether the contracts are ineffective because of violation of the AÜG so that the claimant can only demand compensation for value under unjust enrichment because of supply of workers, the judgment under challenge could not subsist. It is to be quashed on this ground; the case is to be referred back to the appeal court for further explanation and decision.